Report calls for more booze sales competition
Ontarians would be able to buy cheaper and more varieties of alcohol if their provincial government would uncork competition, a new report by C.D. Howe Institute says. (QMI Agency file photo)
Ontarians would be able to buy cheaper and more varieties of alcohol if their provincial government would uncork competition, a new report by C.D. Howe Institute says.
Uncorking a Strange Brew: The Need for More Competition in Ontario's Alcoholic Beverage Retailing System, calls for the sale of booze in grocery and corner stores.
The analysis also recommends licensing new beer and wine retailers to compete with the "quasi-monopoly" of The Beer Store, LCBO, Wine Shop and Wine Rack.
"The lack of competition in Ontario's system for alcoholic beverage retailing causes higher prices for consumers and foregone government revenue," the report, released Wednesday, says. "A major component of the lack of competition is the disadvantage faced by small Ontario wineries and breweries relative to the larger producers."
The report disputes conclusions by The Beer Store -- privately- owned by Labatt Brewing, Molson Coors Canada and Sleeman Breweries -- that Ontarians would pay $10 more for a two-four if corner stores were allowed to sell booze.
The Beer Store released a report last year that says prices were generally higher in Quebec than Ontario despite the increased competition.
Anindya Sen, one of the authors of Uncorking a Strange Brew, said they compared prices in the two jurisdictions and, after factoring in taxes and bottle returns, found that Ontario consumers are generally shelling out more money for their brew, especially for international beer brands such as Corona that in an "apples to apples" comparison cost $9.36 extra for a case of 24.
"You do see significant differences in prices," Sen said. "These outcomes are the result of government regulations."
One of the reasons that Ontarians pay so much more for their beer in restaurants and bars is that The Beer Store charges commercial customers $5 to $11 more per two-four, the C.D. Howe authors noted.
According to the report, a bar or restaurant will pay $45.75 for 24 bottles of Budweiser, a $10.80 mark up from the price charged regular retail customers of The Beer Store.
"They might just pass this on to consumers. If they do that, then at the end of the day it's still consumers paying more," Sen said. "But I don't think it's very helpful to the restaurant industry."
Premier Kathleen Wynne has already rejected allowing alcohol sales in corner stores, but her government has launched a pilot project to bring LCBO Express Stores to some grocery outlets.
Susie Heath, a spokesman for Finance Minister Charles Sousa, said in an e-mail that Ontarians are well served by the current model.
"Last year, the LCBO generated $1.74 billion in transfers to the province, the 20th consecutive year the agency has increased its dividend to the province," Heath said. "The strength of the LCBO model is in a balance between customer convenience and selling alcohol in a socially responsible manner."